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Frequently Asked Questions

(The following information is intended for general information and as an aid to understanding insurance. The information provided is not a complete description of all terms, conditions and exclusions found in your policy. For a complete description of the terms, conditions and exclusions of insurance coverage please refer to your policy. The actual terms, conditions, and exclusions of the policy control.)


Do I have a grace period for my Mercury auto renewal?

The simple answer is no. If the payment is not received for your renewal on or before the renewal date and time (policies start at 12:01am) there will be a lapse in coverage until the payment is received. For example if the renewal is 3/1 and the payment is received 3/9 there would be no coverage for the period 3/1 to 3/9. This is called a reinstatement with a lapse in coverage. Also too many notices of cancellations or reinstatements can lead to the permanent cancellation of your policy. Best practice - be sure to get the premium payment to the company when due.


Getting a new or used car? Is it automatically covered?

Well the answer is maybe! In some situations you have 30 days to let us know about it, but there are some situations where there would be no coverage until you let us know. Why take that chance, the better path is to tell us before acquiring a new car. That action will help avoid coverage questions should an accident occur after the acquisition.


Am I covered if I rent a car? Do I need to buy the insurance offered by the rental company?

The coverage that you have on your auto policy also applies to a rental car, so as along as you have adequate liability limits and physical damage coverage on a car on your policy you would have the same coverage for the rental. Now that sounds good, but what about the things that might happen that are not covered under your auto policy, such as loss of use while the rental is in the repair shop? Not covered! So we always recommend that you buy the loss damage waiver offered by the rental company (a must if you do not have full coverage on your car). No doubt it will remove a lot of headaches, paperwork and cover the hidden expenses that would not be covered under your auto policy. Also check with your credit card company as some credit cards offer rental car coverage.

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What is gap insurance and do I need it on my auto policy?

As the name implies, gap insurance covers what traditional auto insurance doesn't. In other words, it closes the gap between what your insurance company pays if your car is stolen or totaled and what you owe on the lease or to the finance company.

Say you leased your car two months ago for $25,000. You begin making payments at about $500 a month based on a 6 percent interest rate. Then, disaster strikes: a tree falls on your car and flattens it.

You call the insurance company and find out that the actual cash value of your car at the time of the accident was only $20,000. The car may only be a couple of months old, but it has already lost 20 percent of its value. Unfortunately, the lessor still wants the full amount you owe them. With interest, tax and license fees, they figure that to be $27,000.

Yikes! There's a gap of $7,000 between the $20,000 that the insurance company is willing to pay you and the $27,000 the lessor is demanding. Apply the same scenario to someone who bought their car. If they left the dealer's lot without putting several thousand dollars down, they likely owe more than the insurance company will pay if the vehicle gets totaled or stolen in the first few years. Once again, gap coverage can save the day.

So when initiating a car loan or lease, always remember to ask your insurance agent or loan officer about gap insurance. If you have an accident you'll be glad you planned ahead.


How much liability coverage do I need?

Any insurance agent worthy of their salt will tell you that you should buy as much as you can afford. While this is a good rule of thumb, it's about as useful as a stock broker's tip to buy low and sell high. It might be sound logical but it doesn't get you any closer to an educated decision.

A few things to consider:

What are you protecting? If your liability coverage is lower than the amount awarded to the other party, you may need to forfeit your existing assets, as well as some of your future earnings, to satisfy the judgment. Do you have an enormous net worth to protect. If so buy all the insurance you can. If you have little or nothing to protect, then you can get by with less and still be financially responsible.

What other coverage is available and is it affordable? After you determine how much protection to get, always ask how much more for the next higher level. Very often, you can get significantly more coverage for very little cost.

Consider an umbrella policy. It used to be that the only people that needed personal umbrella policies were wealthy individuals who had sizeable amounts of personal assets. However, in our very litigious society many people realize they have a need for greater liability limits than provided by your personal policies. Do you own your home and/or rental property? Have a teenage driver? Own a dog? Have frequent visitors to your property? Serve on a board of a civic, charitable or religious organization? Have a pool, trampoline or swing on your property? Baby sitters or cleaning people coming to your home? The more times you answer yes to any of these questions the more likely it is you need an umbrella policy.

Not having enough coverage can be the difference between financial stability and financial ruin. We find financial stability appealing; to learn more, give us a call at 310-373-6441.


Will my auto policy cover me in Mexico or Canada?

Most U.S. policies cover you if you drive in Canada, but you must remember to have evidence of insurance with you. Mexican traffic laws are so significantly different from those in the U.S. and Canada (some accidents may come under criminal statutes) that Mexican coverage is required.


What should I do if I have a loss at my home?

  • Notify your agent or insurance company - Report a claim
  • Protect your property from further damage. If needed call our restoration company for water mitigation, board up service etc. Save the receipts for the temporary repairs, and submit them to the insurance company for reimbursement. Permanent repairs should not be made until after the company has had a chance to inspect the damaged property.
  • If you are unable to live in your home, keep your insurance company informed of your whereabouts so they can reach you.
  • Itemize your contents loss (this is where your inventory list is extremely helpful) including copies of the receipts for the larger items
  • If the loss is due to a criminal act, such as burglary or theft, notify the police

You must prove your loss, and receipts are the best way to do it. If you don't have receipts, then photos of the damaged or missing items taken prior to the loss may help prove the loss. Brochures and other materials may be helpful as well. If your company requires a "proof of loss" form to be submitted, completing it and submitting it in a timely manner will help prevent delays in the claim process.


What should I do if I have an auto accident?

  • Help or get help for injured people.
  • Warn motorists (use flares, hazard lights).
  • Call 911 to contact the police or California Highway Patrol if an injury or death occurs.
  • Exchange vital information with the other driver involved in the car accident.
  • Write down the name, address, phone number and license numbers for all drivers and witnesses, particularly those who were not riding in a vehicle involved in the accident. Ask for the insurance companies and policy numbers for drivers involved in the car accident.
  • Cooperate fully with law officers, but speak with your insurance company or insurance agent and/or lawyer before accepting any blame.
  • If your car is drivable drive it home, if not have it towed and if you have comp/collision storage fees are covered by the company. Sign release so insurance company can pick it up. Remove personal items from the vehicle.
  • Notify your agent or insurance company - Report a claim

How much life insurance do I need?


Medical PPOs, HMOs, EPOs it's all so confusing; what does it mean?

Types of Health Insurance Plans

 

Traditional Fee-for-service

 

Preferred Provider Organizations (PPOs)

 

Point-of-Service (POS)

 

Exclusive Provider Organizations (EPO)

 

Health Maintenance Organizations (HMOs)

Traditional health insurance
Up until about 30 years ago, most people had traditional indemnity coverage. These days, it's often known as "fee-for-service." Indemnity plans are a bit like auto insurance: you pay a certain amount of your medical expenses up front -- in the form of a deductible -- and afterward the insurance company pays the majority of the bill.

Advances in modern medicine increased the cost of providing health care and made it possible for people to live longer. Those advances caused many insurance companies to look for ways to reduce their costs of doing business, giving managed care the boost it enjoys today.

Fee-for-service
For years, indemnity or fee-for-service coverage was the norm. Under this type of health coverage, you have complete autonomy when it comes to choosing doctors, hospitals and other health care providers. You can refer yourself to any specialist without getting permission, and the insurance company doesn't get to decide whether the visit was necessary.

You don't, however, have complete autonomy. Most fee-for-service medicine is managed to a certain extent. For instance, if you're not already incapacitated, you may need to get clearance for a visit to the emergency room.

On the down side, fee-for-service plans usually involve more out-of-pocket expenses. Often there is a deductible, usually of about $200, before the insurance company starts paying. Once you've paid the deductible, the insurer will kick in about 80 percent of any doctor bills. You may have to pay up front and then submit the bill for reimbursement, or your provider may bill your insurer directly.

Under fee-for-service plans, insurers will usually only pay for "reasonable and customary" medical expenses, taking into account what other practitioners in the area charge for similar services. If your doctor happens to charge more than what the insurance company considers "reasonable and customary," you'll probably have to make up the difference yourself.

Traditionally, preventive care services like annual check-ups and pelvic exams haven't been covered under fee-for-service plans. But as the evidence mounts that preventive care can prevent more costly illnesses down the road, some insurers are including them.

Fee-for-service plans often include a ceiling for out-of-pocket expenses, after which the insurance company will pay 100 percent of any costs. Needless to say, the ceiling is usually pretty high.
In a nutshell, fee-for-service coverage offers flexibility in exchange for higher out-of-pocket expenses, more paperwork and higher premiums.

Managed care
Managed care has been around in one form or another since the 1930s, but it really took off in the last 10 years. As it grew, it evolved, leaving us with three basic types of managed care plans. Today, the majority of people with private health insurance have some type of managed care.

Although there are important differences among the different types of managed care plans, there are some similarities. All managed care plans involve an arrangement between the insurer and a selected network of health care providers, and they offer policyholders significant financial incentives to use the providers in that network. There are usually explicit standards for selecting providers and a formal procedure to assure quality care.

Preferred Provider Organizations (PPOs)
One step over the managed care border is the Preferred Provider Organization. PPOs have made arrangements for lower fees with a network of health care providers. PPOs give their policyholders a financial incentive to stay within that network.

For example, a visit to an in-network doctor might mean you'd have a $10 co-pay. If you wanted see an out-of-network doctor, you'd have to pay the entire bill up front and then submit the bill to your insurance company for an 80 percent reimbursement. In addition, you might have to pay a deductible if you choose to go outside the network, or pay the difference between what the in-network and out-of-network doctors charge.
With a PPO, you can refer yourself to a specialist without getting approval and, as long as it's an in-network provider, enjoy the same co-pay. Staying within the network means less money coming out of your pocket and less paperwork. Preventive care services may not be covered under a PPO.

Exclusive Provider Organizations (EPO)
Exclusive Provider Organizations are PPOs that look like HMOs. EPOs raise the financial stakes for staying in the network. If you choose a provider outside the network, you're responsible for the entire cost of the visit.

Point-of-Service (POS)
Point-of-service plans are similar to PPOs, but they introduce the gatekeeper, or Primary Care Physician. You'll need to choose your PCP from among the plan's network of doctors.

As with the PPO, you can choose to go out of network and still get some kind of coverage. In order to get a referral to a specialist, though, you usually must go through your PCP. You can still choose to refer yourself, but it'll mean more hassles and more money coming out of your pocket.

If your PCP refers you to a doctor who is out of the network, the plan should pick up most of the cost. But if you refer yourself out, then you'll probably have to deal with more paperwork and a smaller reimbursement. You may also have to pay a deductible if you go outside the network.

POS plans may also cover more preventive care services, and may even offer health improvement programs like workshops on nutrition and smoking cessation, and discounts at health clubs.

Health Maintenance Organizations (HMOs)
Most of the time, when you talk about HMOs, you're really talking about closed-panel HMOs -- the least expensive, but least flexible type of health plan. They also tend to be geared more toward members of group plans than individuals.

In exchange for a low co-payment (or sometimes no co-pay at all), low premiums and minimal paperwork, an HMO requires that you only see its doctors, and that you get a referral from your primary care physician before you see a specialist. If you can still pick up the phone, you'll probably need to get clearance before you can visit the emergency room.

An HMO may have central medical offices or clinics (such as those used by Kaiser Permanente), or it may consist of a network of individual practices. In general, you must see HMO-approved physicians or pay the entire cost of the visit yourself. HMOs have the best reputation for covering preventive care services and health improvement programs.


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